BILL TO CONTROL HEALTHCARE COSTS DRAWS FIRE FROM PHYSICIANS’ GROUPS AND HOSPITALS

By Miriam Raftery

April 30, 2018 (Sacramento) – The state Assembly’s Health Committee has approved Assembly Bill 3087, the Health Care Price Relief Act. The controversial bill would create the California Health Care Cost, Quality and Equity Commission to set amounts that health plans, hospitals, doctors and other health providers may charge. 

The bill by Assemblymember Ash Kalra (D-San Jose) is backed by labor and consumer groups, but opposed by the California Medical Association, California Hospital Association, and numerous other medical groups. Supporters say it’s needed to protect consumers from medical costs spiraling out of control, while opponents say it could drive physicians out of state or into early retirement, limiting access to providers while having only limited impact on healthcare costs.

Arguments in favor

Anthony Wright, executive director of Health Access California, a patient advocacy group co-sponsoring the legislation, writes in a Sacramento Bee editorial that the bill aims to “provide a fair, but not inflated, rate to doctors, hospitals and health plans – and to stop health care price-gouging.”

Another co-sponsor is the California Labor Federation. Steve Smith, on the CLF’s Labor’s Edge blog, writes, “Out of control health care prices have created a crisis that is squeezing families, businesses and patients. There’s no rhyme or reason to health care prices, and very little transparency. That needs to change.”

He cites a University of Chicago study which found over 40 percent of Americans skipped a doctor visit when they were sick or injured in the past year, with over half of adults putting off procedures due to high costs.  Smith says healthcare deductibles have increased six times faster than wages since 2010, hitting working families hard.

Advocates note that patients in the U.S. pay more for healthcare compared to all other developed countries around the world – as much as 20 times more, Smith says. Other countries worldwide and the U.S. Medicare system all establish fair prices that allow providers a reasonable profit while keeping rates affordable to consumers, supporters says, and AB 3087 would use a similar model that includes a process for doctors and hospitals to adjust prices if necessary.

Arguments against

A press release from the California Medical Association, representing doctors, calls the bill a “harmful intrusion into the health care market that would decimate California’s health care system limit access to health care providers, create state-sanctioned rationing and increase out of-pocket costs for patients.”

A survey of 345 California physicians, conducted by CMA which has 23,000 members, found 92% oppose AB 3087 and 59% said it would force them to leave California to practice elsewhere.   Of the 81% who currently serve Medi-Cal patients, 635 said they believe the bill would force them to decrease the number of Medi-Cal patients that they serve and 60% feel the bill would exacerbate California’s physician shortage.

An estimate by the California Hospital Association claims the bill would cause an estimated 175,000 hospital workers to lose jobs and force many hospitals and medical practices to close.

CHA president and CEO Carmela Coyle says, “AB 3087 is a big, bad bill for the health of California.  “All this bill does is to say what price people are going to pay for a service; it does nothing to address the underlying costs of care” though she does not clarify what those underlying costs are, beyond the prices charged by hospitals and physicians. She estimates the bill would leave 60% of hospitals in the red, adding, “Access to health care services for all Californians would be at risk if AB 3087 is enacted.